2006-2009 auditor general report on roads development agency

8/9/2019 2006-2009 Auditor General Report on Roads Development Agency

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REPORT

OF THE

AUDITOR GENERAL

ON THE

ROAD DEVELOPMENT AGENCY

FOR THE PERIOD

JANUARY 2006 TO SEPTEMBER 2009

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Executive Summary

The audit of the Road Development Agency (RDA) for the years 2006 and 2009 wasconducted in accordance with the provisions of Article 121 of the Constitution of Zambia,Cap 378 of the Laws of Zambia and Public Finance Act No. 15 of 2004.

The objectives of the audit were among others to ascertain whether:

Procurement procedures were followed in the award of contracts; Roads projects were administered in accordance with contract agreements; and Expenditure was in conformity with the Laws of Zambia.

The following were observed:

a. Annual Plan and Budget

i. Over commitment

The Agency committed Government to expenditure in excess of money appropriatedby Parliament contrary to section 7(3) of the Public Finance Act No.15 of 2004. Theover commitment amounted to K1,015,817,097,718 in 2008. This resulted in seriouscash flow problems in 2009.

ii. Inadequate Provisions for Contracts

Adequate funds were not provided in the budget to cover the contracts. This resultedin delayed payments and completion of works.

b. Procurement Stage

i. Lack of Drawings and Condition Survey

Drawings for the contracts were in most cases either delayed or not prepared andcondition surveys were not conducted leading to inadequate interventions andunnecessary variations.

ii. Engineers Estimates

Contrary to common practice the engineers estimates were not used when carryingout evaluations . It was therefore difficult to ascertain the reasonableness of the bidsums.


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iii. Late Engagement of Supervising Consultants.

Consultants were mostly engaged later than the starting date of the works contract. Inthis regard part of the contract period were running without supervision.

iv. Negotiation Meetings

RDA did not usually hold contract negotiation meetings despite the inconsistencies inthe evaluation and poor contract documents.

v. Poor Quality Contract Documents

Form of agreement in the contract are at times not signed and have no date. Sections indicated as forming part of the contract such as drawings were

missing in some cases.

Contracts for unpaved roads would have drawings for a paved road.

c. Execution Stage

i. Poor contract Administration

There were considerable delays in decision making relating to issues raised byconsultants/contractors which in some cases led to extension of time and additionalcosts.

ii. Non Submission of Performance Bonds

The clause on performance bond was not always respected thereby failing to penalizethe contractor in case of none performance.

iii. Delayed Payments to Contractors and Consultants

Some Payments to contractors were delayed resulting in interest charges and standingtime.

iv. Irregular Payments

In some cases payments were made for works not done

v. Irregular Instructions to the Contractors

In some cases the Agency issued instructions directly to the contractors disregardingthe consultants. The instructions were mostly related to payments to RDA staff and

service of RDA motor vehicles.


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vi. Delayed Works

There were very few projects which were completed on time. In most cases thecontracts had to be extended and in some cases more than once. There were also caseswere RDA instructed the contractors to slow down or stop works because of lack of funds.

vii. Progress Reports

Progress reports were in a number of cases not prepared by the supervisors.

viii. Variations

Decisions on variations were in some cases not justified by the contractor andtherefore un reasonable .

ix. Supervision Funds

In cases where the supervision of the contracts was done by RDA, supervision fundswere paid through the contractor thereby raising issues of objectivity.

x. Poor Quality Works

Poor quality works were observed on most of the contracts reviewed.

d. Analysis and Comments on the Test ResultsAnalysis of results for road test samples that were collected from eighteen (18) projectsas part of the audit for Road Work carried out by the RDA in 2007/2008 revealed thefollowing results;


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1 44% of samples tested did not meet gradation requirements as soil/aggregateparticles were either too large or too small than required by specifications.

The consequence is the poor bondage,compaction and w ashing away of particles.

2 75% of samples tested were too plasti c in that the samples had too muchclay than required . This would lead to rapid expansion and cracking of theroad.

3 67% of aggregates did not meet the requirements of crushing strength. Pooraggregates easily get crushed by moving loads and leads to fast deteriorationof roads

4 81 % of base thickness were thinner than what was specified5 39% of surface dressing samples stripped off from the base course6 82% of Surface dressing lay ers were thinner than specified7 100% of stabilized samples taken had cement content less than specified

8 50% of concrete samples tested were weaker than what was specified

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Table of ContentsIntroduction................................................................................................................................1 Audit Objective ..........................................................................................................................1 Scope and Methodology ............................................................................................................1 Background................................................................................................................................2

Administration ...........................................................................................................................2 Review of Operations ................................................................................................................3 6. Finance and Administration .................................................................. ........................................................ 3

a. Questionable Composition of Committees ...................................................................... 3 b. Irregular Payment of Internet Bills for the Chairman .....................................................4 c. Irregular Payment of Insurance Premiums for Board Members ......................................4 e. Irregular Use of Fuel ........................................................................................................5 f. Irregular Drawing of Fuel ................................................................................................5 g. Unretired Imprest .............................................................................................................6

7. Procurement of Contracts... ............................................................... ............................................................ 6 a. Adequacy of Bid Period ...................................................................................................6

b. Appointment of Evaluation Committee ...........................................................................6 c. Bids Responsiveness ........................................................................................................6 d. Consistency in Application of the Evaluation Criteria.....................................................7 e. Over Procurement ............................................................................................................7

8. Management of Contracts............................................................................................................................10 a. Omission of Auditor Generals Clause ..........................................................................10 b. Non-availability of Designs / Drawings during Tendering............................................10

9. Lusaka Province............................................................................................................................................11 a.Design and Construction of Selected Chalala Roads, Mosi-O-TunyaRoad Extension,

Part of Shatumbu Road and South of Chilenje South Newly Constructed Road Parallelto Zesco Pylons Based on Integrated Construction Unit (ICU) Method of Works........11

b.Periodic Maintenance of Road D176 Ngwerere to Chisamba and D753 Ngwerere toLusaka International Airport In Lusaka (TB/CE/031/07) ..............................................13 c. Emergency Periodic Maintenance of Palabana and State Lodge Roads in Chongwe

District of Lusaka Province, Tender No.RDA/SP/0011/08 ...........................................15 d. Periodic Maintenance of Road T004 from Lusaka International Airport Turn off to

Luangwa Bridge .............................................................................................................17 e. Periodic Maintenance and Rehabilitation of 45km of Selected City Roads in Lusaka

Province ..........................................................................................................................20 f. Periodic Maintenance of Namalundu Road Off T2 Kafue Gorge (D396) in Lusaka

Province ..........................................................................................................................21 10. Copperbelt Province ...................................................................... ............................................................ ... 24

a. Upgrading of the Luansobe Mpongwe Road (50km)-Contract No. TB/CE/043/08 ...24 b. Periodic Maintenance of T3 Kemuz - Teka Farm - Silangwa.......................................26 c. Periodic Maintenance Works of the Town Center - Roan Mpatamatu Road (13km) in

Luanshya on the Copperbelt Province (RDA/CE/04/008) .............................................29 11. Southern Province.........................................................................................................................................30

a. Rehabilitation of A34.7 Km Portion of T2 between Chirundu and Lusaka Km75.0 tokm109 .............................................................................................................................30

b. Contract for the Emergency Repairs of Lusitu Bridge Along M15...............................33 c. Contract for the Periodic Maintenance of Road D347, Kalomo to Kabanga Mission in

Southern Province 70.1km .............................................................................................38 d. Kafue Mazabuka Road T1- Periodic Maintenance ( TB/CE/005/08 ) ........................40

e. Zimba Livingstone Road TB/CE/019/08, 30KM........................................................42 f. Zimba Livingstone Road T1 Km 30.00 to km 72.80 TB/CE/096/08..........................43 g. Contract for the Periodic Maintenance of Road D775 from Batoka to Maamba...........45


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h. Periodic Maintenance of Road D365: Monze - Niko - Chitongo & Hamusonde - MaalaRoad................................................................................................................................50

i. Contract for the Construction of the Choma to Chitongo Road.....................................57 12. Eastern Province ............................................................... ................................................................ ............ 61

a. Contract for the Upgrading of Selected Chipata Township Roads LOT-1 (17.78Km)and LOT-2 (8.52Km) in Chipata District in Eastern Province.......................................61

b. Periodic Maintenance of the M12 Road Chipata to Lundazi Road................................64 c. Emergency Repair of Road D134 (Petauke to Chilongozi Road) and Ukwimi Sonja,

Including a Portion of (Ukwimi B)-114km in Eastern Province....................................67 13. North Western Province...............................................................................................................................69

a. Upgrading to Class 1C Bituminous Standard of the Kasempa Turnoff to KabompoRoad (M8) ......................................................................................................................69

b. Periodic Maintenance of Kasempa to Lalafuta Bridge Road (D301) ............................69 c. Periodic Maintenace of Road T005 from Lumwana(km138+000) to Mwinilunga .......70 d. Periodic Maintenance of Road T005 from Solwezi via Mutanda to Mwinilunga

(Lumwana 1st Gate) .......................................................................................................71 e. Rehabilitation, Spot Improvement and Drainage Work on the Kanyambila- Chifuwe

Road................................................................................................................................73

14. Western Province..........................................................................................................................................74 a. Mongu -Kalabo Road.....................................................................................................74 b. Routine Maintenance by Performance Contract of the M10 Kalongola Pontoon- ........77 Sioma Road (70km) in Western Province..........................................................................77

15. Luapula Province.................................................................. ...................................................................... .. 79 a. Periodic Maintenance of Road D235 from T2 Junction in Serenje via Mukuku Bridge to

Samfya, including Sections of Samfya to Mansa Road (D94).......................................79 b. Samfya Turn Through Lubwe Mission via Mwewa to Kasaba .....................................81 i. Failure to Follow Specifications ..................................................................................81 ii. Poor Drainage ............................................................................................................... 82 c. Rehabilitation and Maintenance of Boma/Nchelenge Habour Road .............................83

16. Central Province ............................................................. .................................................................. ............ 85 a. D207-Picadilly Circus-D200/Kabwe Town Boundary to Old Mkushi..........................85

17. Northern Province .................................................................... .................................................................. .. 86 a. Periodic Maintenance of Kusefya Pangwena Road......................................................86 b. Rehabilitation and Maintenance of Hospital Road in Nakonde District........................87 c. Emergency Construction of Rosa Bridge in Mungwi ....................................................89 d. Periodic Maintenance of Kasama Mbala Mpulungu Road Lot 2.............................91 e. Periodic Maintenance of Kasama Mbala Mpulungu Road, Lot 1...........................92 f. Reconstruction and Realignment of Luwingu to Kasama Road M3............................93 g. Periodic Maintenance of Senga Hill to Chinakila Road ................................................95 h. Periodic Maintenance of (D56) Safwa to Chinsali.........................................................95


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Introduction

1. This report on the audit of the Road Development Agency (RDA) for the years 2006 to 2009is submitted to the President for tabling in the National Assembly in accordance with theprovisions of Article 121 of the Constitution of Zambia and Cap 378 of the Laws of Zambia.

Audit Objective

2. The objectives of the audit were among others to ascertain whether procurement procedureswere followed in the award of contracts, roads projects were administered in accordance withcontract agreements and whether the expenditure was in conformity with the Laws of Zambia.

Scope and Methodology

3. The report is a result of an audit carried out at the Road Development Agency. The audit wasplanned and performed such that sufficient evidence, explanations and all necessaryinformation were obtained to reach reasonable conclusions. In conducting the audit, tests of accounting records maintained at the Agency, the National Roads Fund Agency and theMinistry of Works and Supply such as accounting documents, tender documents, contracts,certificates of completed works, progress reports and other relevant records were reviewed.

In the course of preparing this report the Controlling Officer in the Ministry of Works andSupply was required to confirm the correctness of the facts presented. Where comments werereceived and varied materially with the facts presented, the relevant items were amendedappropriately.


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Background

4. The Government of the Republic of Zambia (GRZ), with assistance from its CooperatingPartners (CPs) that comprised the World Bank (WB), European Commission (EC), DanishDevelopment Assistance (Danida), Japanese International Cooperation Agency (JICA),

Nordic Development Fund (NDF), Africa Development Bank (AfDB) and GermanDevelopment Bank (KfW) developed a Road Sector Investment Programme (ROADSIP).The goal of the programme was to systematically maintain and rehabilitate a core roadnetwork and to bring it to a maintainable standard by the year 2013. ROADSIP I covered theperiod from 1997 to 2007 and was extended to 2013 under ROADSIP II.

In 2002, three (3) new road sector agencies namely the National Road Fund Agency (NRFA),the Road Development Agency (RDA), the Road Transport and Safety Agency (RTSA) werecreated through the enactment of the Public Roads Acts Nos. 11, 12 and 13. The Agencies

which became operational in 2005 have the following functions among others:

National Road Fund Agency (NRFA) responsible for mobilizing resources forfunding the road sector and administering the Road Fund.

Road Development Agency (RDA) responsible for planning, maintaining andmanaging the core road network which was previously the responsibility of the RoadsDepartment under the Ministry of Works and Supply.

Road Transport and Safety Agency (RTSA) responsible for road safety, traffic

management, motor vehicle registration and drivers licensing.

The total core road network is 40,113 km comprising 3,088 km of Trunk roads, 3,691 km of Main roads, 13,707 km of District roads, 5,294 km of Urban roads and 14,333 km of PrimaryFeeder roads.

Administration

5. The Public Roads Act No 12 of 2002 provides among other things that the composition of

RDA shall consist of part time members appointed by the Minister as follows:

i. A representative of the National Council for Construction,ii. A representative of the Zambia National Farmers Union,

iii. A representative of the National Science and Technology Council,iv. A representative of the Engineering Institute of Zambia,v. A representative of the Chartered Institute of Transport

vi. A representative of:

the ministry responsible for works and supply; the ministry responsible for communication and transport,

the ministry responsible for local government and housing,


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the ministry responsible for finance; the ministry responsible for tourism; the ministry responsible for agriculture; and the Attorney General;

vii. the Director of the Road Transport and Safety Agency (ex-officio);viii. the Director of the National Road Fund Agency (ex-officio); and

ix. one other person.

The Chairperson shall be appointed by the Minister responsible for Works and Supply whilethe Vice Chairperson shall be elected by the members of the Agency from among theirnumber.

The Agency shall report to the Committee of Ministers on the Road Maintenance Initiative atsuch times and such places as the Minister may determine.

The Agency appoints the Director and Chief Executive Officer who is responsible for theday-to-day administration of the Agency and is assisted by the Managers for CorporateServices, Construction and Maintenance, Planning and Design; and Heads of Departments.The Director and Chief Executive Officer, Managers and Heads of Departments areappointed on three-year renewable contracts while the rest of staff is appointed on apermanent and pensionable basis.

The current board was appointed in 2004 for a term of three (3) years and then reappointed in

2007 for another three year term.

Review of Operations

An examination of financial and other records maintained at headquarters for the financialyears ended 31 st December 2006 to 2009 revealed the following:

6. Finance and Administration

a. Questionable Composition of Committees

In order to enhance the quality and efficiency of decisions made by the board, threecommittees were established; administration and finance, technical and auditcommittees.

It was observed that the chairperson of the finance and administration committee wasalso the chairperson of the board. In addition, it was observed that the full sitting of the finance and administration committee also constituted a quorum of the board.


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Although in his response dated 9 th March 2010, the Controlling Officer stated thatthe Board however at its meeting of 20 th meeting held on 7 th May 2009 resolved toreduce the size of the Administration and Finance Committee with the Chairpersondifferent from the Board Chairperson. As of 9 th March 2010, the resolution had notbeen implemented.

b. Irregular Payment of Internet Bills for the Chairman

Although the Agency provided the Chairman with an office with internet services, itwas observed that in January 2007 and March 2008, the Agency paid K1,416,743 andK1,273,000 respectively for the provision of internet services at the BoardChairmans private premises.

The payments of amounts totalling K2,689,743 in respect of internet services at theBoard Chairmans private premises was irregular.

c. Irregular Payment of Insurance Premiums for Board Members

In June 2007 and August 2008, the Agency paid K17,390,625 and K20,446,875respectively to NICO Insurance for group personal accident policy for board memberswithout authority from the Minister. It was further noted that the facility was notavailable to staff who were fully involved in the day to day operations of the Agency.

Although in his response dated 9 th March 2010, the Controlling Officer stated that the

correspondence from the Board Chairman and the response from the Minister Worksand Supply was submitted to the auditors, the authority had not been availed as of 10 th March 2010.

d. Irregular Sale of Personal to Holder Motor Vehicles

Contrary to Management Conditions of Service, in March 2009, management soldfive (5) motor vehicles to five (5) officers without obtaining authority from the Boardas shown in the table below:

NamePrice

KMileage

RegistrationNo.

Director &CEO 33,593,967 87,738 ABF 3303Former Director &CEO

57,079,500 87,738 ABH 1878

Commercial & TechnicalServices - Senior Manager

40,390,359 85,535 ABH 725

Former CorporateServices Manager 39,302,910 55,000 ABH 3279

Construction & Maintenance

- Senior Manager40,722,159 95,233 ABH 723

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Further, as can be seen from the table above, the motor vehicles tachometers had notclocked 100,000 km as stipulated in the Management Condition of Services.

Although in December 2009, management sought for retrospective Board authority tohave the sale approved, the Board rejected the proposal. It was observed however thatout of the five (5) motor vehicles sold, three (3) had been returned to the Agencywhile two (2) were still in the custody of the two employees who were no longer withthe Agency.

e. Irregular Use of Fuel

The Agency maintained a fuel account with Total (Z) Ltd. The fuel was drawn usingtom cards allocated to the Agency. An examination of records and inquiries madewith management relating to the purchase and usage of fuel revealed the following:

The account was not reconciled during the period under review. In this regard, itwas observed that during the period March 2007 to April 2008, fuel costingK70,306,610 had been charged to the Agency using tom cards not registered tothe Agency.

In May and June 2009, fuel in amounts totalling K28,262,205 was drawn withoutrequisitions.

The Agency did not maintain a fuel register and relied on information from thesupplier statements. The statements from the supplier only indicated the card

numbers and did not indicate the vehicle registration numbers. In this regard, itcould not be ascertained whether all drawings reflecting in the statements weremade by the Agency.

Although in his response dated 9 th March 2010, the Controlling Officer stated that therecords which showed that the card was allocated to the pool were availed to theauditors for inspection, the documents had not been availed .

f. Irregular Drawing of Fuel

i. Although the contract of employment for the manager corporate servicesexpired on 1 July 2009, the Agency did not withdraw his tom card. In thisregard, it was observed that during the period from July to August 2009,the former manager drew fuel costing K6,099,038. As of December 2009,only an amount of K4,181,112 had been recovered leaving a balance of K1,917,926 outstanding. It is not clear how the Agency will recover thebalance since the former manager had since been paid his benefits.

ii. During the period from April 2007 to 1 st February 2009, the former

Director and CEO, whilst on forced leave irregularly drew fuel costing


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K86,914,219 from an RDA account despite having being paid amountstotalling K37,960,000 as fuel allowance for the same period.

g. Unretired Imprest

Contrary to Financial Regulation No. 96, imprests in amounts totallingK19,118,705,403 issued to the Agency by NRFA for various road activities during theperiod 2004 to 31 st December 2009 had not been retired.

7. Procurement of Contracts

a. Adequacy of Bid Period

The Public Procurement Regulations of 2005, require that the bidding period must bebetween four (4) and eight (8) weeks. It was observed that the majority of bidding

periods had been twenty five (25) days irrespective of project size.

b. Appointment of Evaluation Committee

There were no criteria for the appointment/composition of the evaluation committee.In this regard, it was observed that the members of the committee were mainlyappointed from the planning and design department. In most cases, the evaluationcommittee comprised three (3) engineers from planning and design departmentnamely, the principal engineer and two (2) engineers, thereby casting doubt on the

objectivity and effectiveness of the committee.

It was further observed that the procedure for appointment and approval of theevaluation committee was not formalised as only handwritten notes were used tonominate the members of the evaluation committee.

c. Bids Responsiveness

There was a high percentage of submissions which were judged to be non-responsiveat the administrative stage and thus eliminated from further evaluation. An analysisof fourteen (14) small contracts, where the bidders tended to be more inexperiencedrevealed that the average rejection rate was 41%. In some cases the rejection rate wasas high as 65%.

This high percentage indicated that either the bidders had not understood the biddingdocuments or that the evaluators were being too restrictive in their judgment,especially for the smaller bidders.


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d. Consistency in Application of the Evaluation Criteria

The evaluation committees were on a number of occasions inconsistent in theirapplication of the evaluation criteria. For instance during the evaluation of theNakatindi Road M10 project , a bidder was eliminated because his wages were lowerthan the legal minimum, while another committee for the construction of Muombeculverts project, a bidder who stated that his wages were lower than the legalminimum, was allowed to proceed, on the basis that he would be forced to obey thelaw if he won the contract.

e. Over Procurement

A provision of K1.2 trillion was provided in the 2008 budget comprising K685 billionfrom local sources and K515 billion from external sources. A total of K670.4 billionwas released from the treasury while the Cooperating Partners funded a total of

K264.199 billion bringing total releases to K934.59. A total sum of K842.42 billionwas spent in 2008 and a sum of K92.17 billion was carried forward to 2009.

In 2009, a provision of K1,356.84 billion comprising of K715.45 billion localresources and K641.396 billion external resources was provided in the annual work plan. As of September 2009, Government had released a sum of K693.34 billionwhilst the cooperating partners had released a total of K88.06 billion.

2008Budget

K'BillionReleasesK'Billion

ExpenditureK'Billion

BalanceK'Billion

GRZ 685.00 670.40 675.11 Donor 515.00 264.19 167.31 Total 1,200.00 934.59 842.42 92.17

As at August 20 09 the following were the release s and expe nditure:

GRZ 715.45 693.34 753.90 Donor 641.39 88.06 137.51 Total 1,356.84 781.40 891.41

According to the Public Finance Act of 2004 7(3), every controlling officer shall becharged with the duty of planning and controlling the expenditure of public fundsunder the controlling officers control so that not committing Government toexpenditures in excess of money appropriated by Parliament.

The following were observed;

i. Over Commitment of Funds

Contrary to the Appropriation Act of 2008 and the Public Finance Act No. 15 of 2004, it was observed that the Agency committed Government to expenditures inexcess of money appropriated by Parliament. The approved budget provision for

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the year 2008 on local resources was K685 billion while the Agency committedGovernment to contracts in the sum of K1.643 trillion, resulting in an overcommitment of K1,015 trillion.

It was also observed that five (5) road projects in amounts totallingK182,455,297,524 were procured outside the 2008 work plan and authority toprocure these projects was not availed for audit.

ii. Unauthorised Budget Variations

Contrary to Financial Regulation No.31, which states that Controlling Officersshould obtain authority from the Secretary to the Treasury to vary funds, theAgency varied funds in amounts totalling K10,000,000,000 from M18 (Sakala viaLufwanyama to Ingwe) to other projects without authority.

Further, it was observed that the Agency varied funds in amounts totallingK43,069,310,029 relating to six (6) projects without approval from the Board.

iii. Inadequate Budget Provision

Whereas certified works in respect of thirty eight (38) projects rolled over fromprevious years amounted to K207,368,650,817, only K113,600,288,000 wasprovided for in the 2009 budget resulting in an overrun of K93,768,362,817 asshown in the table below:


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ContractName of

ContractorContract

Period

Contractprice

KProvision

KVariance

KBauleni Turn off toState Lodge andSelectedRoads primary

in NyumbaYanga Raven worksConstruction

Six (6) months

commencing 1July 2008 18,199,114,715 10,000,000,000 8,199,114,715

By pass roadfrom Kafueto ChilumbuluRoad

RankinEngineeringConsultants

Nine (9) monthscommencing 25

February 2008 14,637,211,088 8,000,000,000 6,637,211,088 Selected ChalalaRoad,Mosi-o-Tunya,part of ShantumbuRoad

BrianColquhoun,Hugh O'Donelland Partners(BCHOD)

Eight (8)monthscommencing7 November

2008 36,896,223,626 14,500,000,000 22,396,223,626

D176 NgwereretoChisamba andD573 NgwereretoLusakaInt.Airport

RaubexConstructionLtd

Six (6) monthscommencing 15

July 2008 13,037,826,849 7,000,000,000 6,037,826,849

Twin Palm, IbexHill-Kabulonga,Avondale-

KabulongaRoads

Ng'andu UWPConsulting

Twelve (12)monthscommencing 9September 2009 57,545,581,878 16,500,000,000 41,045,581,878

Lusaka Int.AirportTurn off toLuangwa Bridge

RaubexConstructionLtd

Eighteen (18)monthscommencing 10July 2008 80,168,600,476 38,030,000,000 42,138,600,476

45km of SelectedCity Roads inLusakaProvince

Road andPavingZambia Ltd

Eight (8)monthscommencing10 September

2008 77,741,065,600 20,500,000,000 57,241,065,600

Luansobe-Mpongwe Road50km

China HenanInt.Cooperation Ltd

Twelve (12)monthscommencing 27october 2009 90,097,344,487 20,000,000,000 70,097,344,487

Limba LambaRoad

China GeoEngineering

Four (4) monthsCommencing 30September 2008 9,487,974,892 7,500,000,000 1,987,974,892

iv. Cash Flows Projections

Although the cash flow statement showed a deficit of K33.576 million, an analysisof the 2009 work plan revealed that the projections were not realistic in that:

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The cash flow did not take into account two hundred and ten (210) newprojects costing K194.839 billion approved in the 2009 work plan. It wasnoted that out the new projects planned for 2009, contracts costingK55.022 billion had been signed as of August 2009.

Projects with a completion date of earlier than July 2010 were projected tobe paid in 2011 e.g. Luwingu Kasama road, Choma Chitongo road,Serenje Samfya- Mansa road, and Luansobe Mpongwe road.

8. Management of Contracts

a. Omission of Auditor Generals Clause

Contrary to section 8 of the Public Audit Act, which requires all contracts that involve

expenditure of the public funds to have a provision empowering the Auditor Generalto have access to and examine all books, records, papers relating to the contract, theAgency did not make a provision in the contract.

The contracts involved are detailed below:

Contract

Contract

Price

K

Bauleni Turn off toState Lodge andSelectedRoads primary inNyumba Yanga 18,199,144,715

By pass road fromKafueto Chilumbulu Road 14,637,211,088 MpongweDistrict:St.Antony

Road, Lot 7 569,927,875 Kemuz-Teka Farmto Silangwa Road 1,932,202,140

b. Non-availability of Designs / Drawings during Tendering

The purpose of designs/drawings is to comprehensively identify the scope and cost of the project and eliminate inappropriateness, inefficiency, error, omission, fault orother defects during implementation and in use. The designs are the major input in thepreparation of the engineers estimates and the Bill of Quantities (BoQs).

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The absence of designs/drawings leads to preparation of inaccurate BoQs which inturn lead to variations in the contract, re-scoping of works and extensions of timethereby delaying completion of projects.

It was observed that there were sixteen (16) contracts with a total contract sum of K644,062,439,475 for which designs/drawings were not prepared at the time of tendering the works.The contracts involved are detailed below:

ContractContract

PriceK

By pass Rd from Kafue/Lumumbato Chilumbulu Rd 14,637,211,088 Ngwerere to Chisamba (D176) &

Ngwerere to Intl Airport(D753) 13,037,826,849 Palabana Rd (D153) &state Lodge (D156) 2,848,430,750 Lusaka Intl Airport to LuangwaBridge (T004) 80,168,600,476 Selected city Rds in Lusaka Province 77,741,065,600 Luansobe to Mpongwe Rd 90,097,344,487 St Anthony Rd,Mpongwe District 569,927,875 Town centre-Roan Mpatamatu Rd 24,328,222,699 Kamfinsa Rd(D249) 14,215,874,275 Lusitu Bridge along M15 7,786,786,786 Monze-Niko-Chitongo & Hamusonde-MaalaRd 24,670,539,465 Choma -Chitongo Rd 164,572,767,310 Chipata Townships Rd 34,379,087,318 Petauke to Chilongozi Rd & Ukwimi Sonja 26,933,372,884 Lumwana to Mwinilunga 67,907,796,063 Mansa to Fiyongoli Farm Block 167,585,550

Total 644,062,439,475

9. Lusaka Province

a. Design and Construction of Selected Chalala Roads, Mosi-O-TunyaRoadExtension, Part of Shatumbu Road and South of Chilenje South NewlyConstructed Road Parallel to Zesco Pylons Based on Integrated ConstructionUnit (ICU) Method of Works

In September 2008, the Zambia National Tender Board (ZNTB) conveyed itsauthority to the Roads Development Agency (RDA) for the award of a contract to

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Brian Colquhoun, Hugh ODonnell and Partners (Z) (BCHOD) for the design,supervision and construction/upgrading of selected Chalala roads, Mosi-o-tunya roadextension and part of Shantumbu road and south of Chilenje South based onIntegrated Construction Unit (ICU) method of works. The contract price was K36,896,223,626 inclusive of VAT and the contract was expected to be completed withinperiod of eight (8) months. The contract was signed on 21 st October 2008 and was tostart on 7 th November 2008 and end on 3rd August 2009.

The scope of works included consulting services for the design, supervision, andconstruction/upgrading of 15.3km selected roads in Lusaka Province.


i. Poor Contract Management

As of June 2009, 15.4km earthworks had been done and an amount of K14,143,540,178 had been certified. According to the minutes for the projectmanagement meeting held on 19 th June 2008, RDA informed the Consultant thatpayments on the project would be delayed because the paying agency had noresources. The RDAs CEO therefore, instructed that the project would be fundedonly up to K10 billion and works to be done to this extent only. Further, RDArequested the contractor for a price for maintenance works.

To this effect the contractor (BCHOD) informed the meeting that the maintenance

would not completely protect the works from deterioration and that there will beadditional costs to remedy the damage that will be occasioned to the incompleteroad sections.

On 18th September, 2009, a variation order No 2, was submitted for the extensionof time as a result of the order to suspend the works. The application for extensionof time was with cost, time related costs, maintenance or gravel re-dumping costsand re-mobilisation totalling to K5,941,011,000 for a period of three months (94days).

ii. Delayed Implementation

Although the duration of the project was eight (8) months commencing 7 th November 2008 and ending on 3 rd August 2009, as of October 2009, only 37% of the works had been done and the contractor had been paid K14,143,540,178.

iii. Physical Inspection

A physical inspection revealed that the sub base layer was constructed and was

not protected from traffic. This led to damaging of the surface and loss of


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material. The work will have to be made good at unnecessary additional costresulting into wasteful expenditure of public funds. See pictures below:

Steep embankment slopeSteep embankment slope

b. Periodic Maintenance of Road D176 Ngwerere to Chisamba and D753Ngwerere to Lusaka International Airport In Lusaka (TB/CE/031/07)

On 4 th March 2008, the Zambia National Tender Board conveyed its authority to theRoads Development Agency (RDA) for the award of a contract to RaubexConstruction Limited for the Periodic maintenance of D176 Ngwerere to Chisambaand D753 Ngwerere to Lusaka International Airport at a contract price of K13,037,826,848.75 with a completion period of six (6) months. The contract wassigned on 1 st June 2008 and was to start on 15 th June 2008 and end on 15 th November2008.

The Scope of works comprised clearing and grabbing-88km, drainage clearing,repairs and installations, road formation-88Km, gravelling-73,000m3, installations of road signs-29No, landscaping and grassing(Planting grass)

The project was supervised by the Road Development Agency -Lusaka RegionalOffice.

As of October 2009, a total of K8,515,183,464 had been paid to the contractorrepresenting 65% of the contract sum.


i. Delayed Completion of Works

As of September 2009, the works had not been completed despite thecontractor having been awarded an extension of time.

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RDA did not claim liquidated damages resulting from the delay incompleting the works as stated in the contract which would have amountedto a maximum of K1,303,782,683 (10% of value of contract price).

ii. Physical Inspections and Test of Materials

Quality of materials used

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The quality of gravel used was varying. In some cases big stones werefound on the road indicating that some of the selected material had muchbigger stones resulting in the quality of the road being compromised. Seepictures below:

Plasticity and gradation tests carried out on a borrow pit sample revealedthat the plasticity of gravel sample was too high (PI>6%) and the gradationdid not fit in SATCC grading envelope.

The road structures at some places were not provided with erosion controlmeasures as noted in some areas along the road. The erosion has alsoaffected part of the road as shown in the pictures below:

Stones on the Gravel Material

Eroded Road Side Drains and Culvert Wing Walls


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Drainage structures

A test of the strength of the concrete using the Schmidt Hammer revealedthat there was a significant variation when compared with what wasspecified i.e. 25 N/sq.mm (Newtons per square milimetre). Results rangedfrom less than 10 to as high as 42 N/sq.mm.

15

An inspection of culverts revealed that there were various damages on thestructures such as cracks and breakages. Some culverts had silted whileothers had not been provided with headwalls as shown in the picturesbelow:

Broken Headwalls

Cracked and Silted Culvert (l) & Without Headwall (r)

c. Emergency Periodic Maintenance of Palabana and State Lodge Roads inChongwe District of Lusaka Province, Tender No.RDA/SP/0011/08

In June 2008, the Agency awarded a contract to Mango Tree Construction Companyfor the emergency periodic maintenance of Palabana (D153) road (12Km) and StateLodge (D156) road (8Km) at a contract price of K2,848,430,750 for a period of twoand half (2.5) months. The contract was signed on 12 th June 2008 and was to start on2nd July and end on 17 th September 2008. The scope of works included road

formation, gravelling, drainage and installation of roads signs and the project wassupervised by Chongwe District Council.


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Though the works had been completed and the contractor had been paid in full as of October 2009, the following were observed:

i. Variations

On 25 th August 2008, a certificate of practical completion of the works washanded over to RDA by Chongwe District Council as the supervisor of the works.During the period of the defect liability, stone pitching which had beenconstructed on the downstream side of the road was washed away. In this regard, avariation order No.2 amounting to K64,500,000 was approved on 6 th February2009 making use of the contingency amount in the bill of quantities. However,there was no report done by the supervising engineer to establish whether thewash away was as a result of poor workmanship by the contractor or an act of God.

It was also observed that the variations were made after the completion date of thecontract (17 th September 2008) and after a practical completion certificate hadbeen issued. This was contrary to standard contract management practices asvariation orders are issued during the period of the contract before the certificateof practical completion is issued.

ii. Overpayment on Certificate Claims

Although the amount due to the contractors in respect of fixed obligations was

K385,000,000, the Agency paid K393,000,000 resulting in an overpayment of K8,000,000.

It was also observed that there was no evidence of approval that the contractorobtained for four (4) extra prefabricated culverts at a cost of K69,300,000 bringingthe total billed amount on this item to K277,200,000. The original billed quantityfor the 900mm diameter was twelve (12) units costing K207,900,000.

Furthermore, it was observed that included in the contractors claim of K2,848,430,750 was an amount of K23,375,000 in respect of employersrepresentative allowances, accommodation and maintenance of the supervisorsvehicle. However, there was no evidence that the funds were remitted to RDA.


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Physical Inspections

A physical inspection of the road revealed the following:

iii. Gravel Quality

The overall quality of gravel used on State Lodge road was poor as it containedbig particles and the binding effect was missing. The small particles were wornout leaving behind the rough surface with ruts and corrugations as shown in thepicture below:

Poor/Rough Road Surface on State Lodge atchainage 0+100 to 0+400

iv. Payment of Work Not Done

Included in the amount paid to the contractor was an amount of K23,100,000 inrespect of the installation 20 new standard road signs. However, it was observedthat only seven (7) signs costing K8,085,000 were installed by the contractorleaving a balance of thirteen (13) signs costing K15,015,000 outstanding.

d. Periodic Maintenance of Road T004 from Lusaka International Airport Turnoff to Luangwa Bridge

In June 2008, the Agency engaged Raubex Construction Limited for the periodicmaintenance of road T004 from Lusaka International Airport turnoff of to LuangwaBridge at a contract price of K80,168,600,476. The contract was for a duration of eighteen (18) months commencing 10 th July 2008. The scope of works comprisedpothole patching and edge break repairs, reinstatement of existing drainage facilities,rehabilitation of existing shoulders, reconstruction of selected sections of the existingpavement, double seal surface dressing, road marking and permanent signage. Theproject was supervised by Messrs Brian Colquhoun Hung ODonnell and Partners.As of October 2009, 65% of works had been completed and the contractor had beenpaid K25,652,398,499.

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i. Late Recruitment of the Supervising Consultant

It was observed that whereas the commencement of the works contractor was 10 th July 2008 the supervising consulting engineer for this project was recruited on17 th September 2008 , two (2) months after the contract had commenced.

ii. Physical verification.

A physical verification of the road revealed the following:

Peeling off of Surface Dressing

Peeling off of aggregates on the first seal of surface dressing was observedalong the Airport Luangwa road.

Peeling off of surface dressing layer from the base course

Peeling off of Surface Dressing on Shoulders

The surface dressing on the shoulders had peeled off at various locations asshown in the pictures below. It was observed that there was no bondbetween the surface dressing and the base course.

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Lack of bond between the base andsurface dressing on the shoulders

Peeling off of shoulder layer of surface

Use of Wrong Size of Aggregates

The specifications of Particular Application had specified the size of aggregates for the second layer to be between 6-13.5mm while in the bill of quantities it was defined to be 6-10mm. It was however observed during thesite visit that the contractor at some points had provided aggregates of morethan 13.5mm. According to the engineer on site, the redesign hadrecommended the second layer to be between 5-9.5mm but since theconsultant was employed late, his recommendation was given when thecontractor had already prepared a substantial amount of aggregate of 13.5mm. The pictures below show various sizes of aggregates used for thesurface dressing.

Second layer aggregates sizes

iii. Test Results

Tests carried out are as follows:

Base course thickness tests on three samples Surface dressing thickness measurement on three samples Bonding tests on one section Visual assessment of aggregate sizes

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Content of cement for stabilization on two samples Gradation on one samples

Results for the above tests were as follows:

Two base course thickness tests failed. They both measured 140 mmagainst 150 mm specified. The third sample measured 155 mm

All three surface dressing thickness tests measured 10 mm against 14 mmexpected.

Wearing course was easily stripped from the base course Aggregates were observed to be bigger than aggregates required for

similar activities. Samples had 1.5% and 1.7% cement content respectively against 3%

specified Gradation fitted in a corresponding SATCC grading envelope.

e. Periodic Maintenance and Rehabilitation of 45km of Selected City Roads inLusaka Province

In May 2008, the Agency engaged Road and Paving Zambia Ltd for the periodicmaintenance and rehabilitation of 45km of selected city roads in Lusaka Province at acontract price of K77,741,065,600 with a contract period of eight (8) monthscommencing 10 th September 2008. The scope of work comprised pothole patchingand edge break repairs, major milling of some sections, reconstruction, asphalt

levelling course, asphalt wearing course, surface dressing, drainage and roadmarking.

The road network under this project had the following roads:

i. Mungwi Roadii. Twikatane/Zingalume Road

iii. Kasupe Roadiv. Airport Roadv. Njolwe Road leading into Lumumba

The project was supervised by Messrs ASCO Consulting Engineers.

As of October 2009, 52% of the works had been completed and the contractor hadbeen paid K26,635,303,863.


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i. Late Recruitment of the Supervising Consultant

The supervising consultant was engaged on 29 th October 2008 while the works

contract commenced on 10 th September 2008 resulting in a delay of over one (1)month.

ii. Physical Verification

A physical inspection of the road revealed that there was no embankmentconstructed at Chainage 1.6 to 2.6 of Zingalume road and the level of the road wasbelow the adjacent ground levels as seen in the picture below;

Road section at chainage 1.6 to 2.6

f. Periodic Maintenance of Namalundu Road Off T2 Kafue Gorge (D396) inLusaka Province

In October 2007,the Agency engaged China Geo- Engineering Corporation for theperiodic maintenance of Namalundu Road off T2 Kafue Gorge (D396) in Lusaka

Province at a contract sum of K14,762,834,185 with a contract duration of four (4)months commencing 30 th October 2007. The scope of works included drainage works,pothole and edge repairs and crack sealing ,bituminous courses /pavement repairsamong others and the project was supervised by RDA.

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Below is a list of contractors who submitted bids:

Bidder Bid SumCompletion

PeriodK

Roads & Paving (z) 8,012,224,119 158 daysChina Geo Eng. Corp 14,762,834,185 4 monthsLandmark Construction Ltd 7,935,423,425 4 monthsRaubex Construction (Z) Ltd 6,255,459,595 110 days

The following were observed;

i. Questionable Composition of Evaluation Committee

The composition of the evaluation committee was not well balanced in that itconstituted of three (3) officers from the same department namely a Principal

Engineer Planning and Design and two (2) Planning and Design Engineers.

ii. Preliminary Evaluation Results

The report revealed that Messrs Roads and Paving Zambia Limited which was thesecond highest bidder was found to be non responsive because the bid securitywas for eighty nine (89) days as opposed to one hundred and twenty (120) days.

Further, Landmark Construction Limited which was the lowest second bidder atK7,935,423,425 was found to be none responsive because for the followingreasons:

No National Council for Construction Registration Certificate wasattached

The bid did not state whether the firm was free from corrupt andfraudulent practices

The bid did not state whether the firm had associated in the past with the

consultant or any other entity that had prepared the design, specificationsand other documents for the contract.

From the above, it can be noted that these reasons advanced could have beenconsidered to be minor deviations which the client could have requested forclarification, for example, to disqualify a bidder on the basis of third bullet pointraises a lot of concern as there were no drawings or consultant and the biddocument was prepared by the Agency.

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iii. Technical Evaluation Results

Raubex Construction (Z) ltd and China Geo Engineering Corporation weretechnically evaluated.

The evaluation committee found the bid from Messers Raubex Construction nonresponsive because it did not propose qualified surveyor for the project. In thisregard, the Agency through the Zambia National Tender Board awarded thecontract to the highest bidder at a tender sum of K14,762,834,185 for a period of four (4) months.

The basis of disqualifying Raubex Construction (Z) Ltd is a minor deviation asstaff on contract are replaceable at the any point in the project life. Had thecommittee acted in the best interest of the Agency and Government at large, a sumof K8,507,374,490 would have been saved.

iv. Irregular Payment of General Obligations

The Contract agreement provided the following among other clauses underspecifications of particular application.

Item B1.1-1 of the contract, Contractors General obligations, states that thepayment shall be made in two (2) instalments , that is, first instalment 60% of thelump sum after contractor has met all his obligations under the section and has

made a substantial start with construction in accordance with approvedprogramme.

The second and final instalment of 40% of the lump sum will be paid when theworks have been completed and the contractor has fulfilled all the requirements of this section (demobilisation)

Contrary to the provisions of the contract, the General Obligations were paid ineach interim payment certificate. The final payment certificate issued before thesubstantial completion certificate indicated that 100% of the general obligationshad been paid.It could not be ascertained as to why the Agency paid the contractor the fullamount before fulfilling the contractual obligations.

v. Irregular Contract Document

The contract form of agreement had no date of signing. The cover to the contractdocument indicated October 2007. The contract data revealed that the start datewould be fourteen (14) days after signing of the agreement. In the absence of the

date of signing it was difficult to determine the contract commencement date.


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However, a review of the progress report indicated that the contract commencedon 14 th December 2007, forty five (45) days after the award of the contract.It was also observed that the section IX for the drawings / maps was blank.Consequently , the scope of works changed after commencement of the workswith a section of 6.5 KM requiring reconstruction.

vi. Lack of Material Testing on Site

There was no provision for material testing on site. A review of the minutes of thethird site meeting held on 10 th March 2008 revealed that the contractor had beentaking his materials for testing in Livingstone. However, a review of the minutesof the fifth site meeting held on 9 th May 2008 revealed that an independent test tocheck the quality of workmanship on the reconstruction that the contractor haddone indicated that the whole section had failed.

10. Copperbelt Province

a. Upgrading of the Luansobe Mpongwe Road (50km)-Contract No.TB/CE/043/08

In August 2008, the Agency engaged China Henan International Cooperation Ltd forthe upgrading of Luansobe-Mpongwe Road at a contract price of K90,097,344,487with a completion period of twelve (12) months commencing 27 th October 2008. Thescope of works comprised; off carriageway clearing, construction of road

embankment, base, surface dressing, installation of new road signs and any otherancillary works. The project was supervised by Besmear Associates in associationwith Bari Zambia Limited.

As of October 2009, a total of K22,199,665,638 had been paid to the contractor andthe project was 62% complete.

A physical inspection of the road revealed the following:

i. Quality aspects

The overall quality of the road as observed during the site visit is summarizedbelow:

Poor Quality of Materials

Contrary to the specifications in the bill of quantities which specified thatthe first and second chip seals were to be 13.2mm and 6.7mm nominal sizesof aggregate respectively, the size of the aggregates for the first layer wereon average found to be 6.5mm. See picture below:


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Surface dressing 1st layer Aggregate for 1st layer

Sequence of Activities

Priming work as observed during the site visit had been done to chainage34+900 on one side and was in progress. It was also observed that thecontractor did not provide the diversions while doing the work, as such theprimed area was open to traffic despite the contract having a provision of K1,344,414,350 for diversions.

Damaged primed road surface Primed road used for traffic

ii. Test Results

Tests carried out are s follows:

Base course thickness measurements for three samples

Surface dressing thickness for three samples

Surface dressing bonding assessment on three sections

Evaluation of cement content on a cement stabilized base

Gradation of three samples

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Aggregate crushing test for a sample of aggregates Plasticity test for a sample of gravel.

The results for the above tests are as follows:

All three base thickness measured were lower than specified. Theymeasure 72 mm, 81 mm and 95 mm against 150 mm specified.

On surface dressing thickness it was observed that out of three samplesmeasured only one met the specifications while two did not. Incidentallythe ones that did not meet the specification also were the same with poorbonding.

Of the three sections where surface dressing bonding was evaluated onewas found to have an adequate bonding while two were inadequate and

stripped. Cement content in stabilized base was lower than what was specified.

Results showed cement content of 1.6 % against 4% specified.

Of three samples subjected to gradation non matched with thecorresponding SATCC specification

Aggregate crushing value recorded was 23 which is less than 25. Theaggregates were therefore of appropriate crushing strength.

Material was non plastic hence within acceptable limits of plasticity i.e. PI< 6%.

b. Periodic Maintenance of T3 Kemuz - Teka Farm - Silangwa

In October 2008, RDA awarded a contract to GABMAN (Z) limited for the periodicmaintenance of road T3 Kemuz - Teka Farm - Silangwa at a contract price of K1,932,202,140 with a completion period of four (4) months. The contract was tostart on 28 th October 2008 and end on 28 th February 2009. The scope of work included clearing and grabbing reshaping/ re-grading, re-gravelling of selected sectionof the road section, drainage improvement and installation of road signs.

As of October 2009 a total of K387,574,560 had been paid to the contractor and theworks were 31% complete. The contract has since been recommended fortermination.


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i. Failure to Provide Performance Guarantee/ Bond

Contrary to clause 52, RDA signed the contract with the contractor without anyperformance security being provided by the contractor.

ii. Irregular Extension of Contract Period

Despite the of extension of time on the contract to 16th June 2009, the contractorstill failed to execute the contract and applied for a further extension of time of 6weeks. However, the Regional Engineer rejected the extension of time andinformed the contractor that liquidated damages of 0.5% would be claimed forany days delay of work up to a maximum of 10% of the contract value.

A review of Interim Payment Certificate (IPC) No. 2 revealed that 10% liquidateddamages of K151,278,000 were claimed on the IPC which in turn resulted in thecontractor owing RDA an amount of K12,219,440.

In the absence of the performance bond, it is not clear how RDA would recoverthe amount owed by the contractor as the contract was recommended fortermination on 8 th September 2009.

iii. Physical Inspection

Road Surface Condition

During the inspection it was observed that the condition of the road bed that hadbeen left uncovered with the gravel fill had weakened and the top soil hadbecome very loose generating dust.

Formation work on the Wengwe access was not completed as of September 2009.The first kilometre had been partially completed.

Road Bed with dust (l) and Road bed formed without gravel fill(r)

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Poor Drainage Structures

The culverts installed had either not been completed or not provided with proper

inlets and outlets to allow water to flow smoothly into and away from theculverts. The quality of concrete used was also considered to be of low strengthas some of the edges could break easily.

Heaps of gravel fill not spread

Culvert Headwall With Some Breakages Culvert Without Headwall

Culvert without inflow/outflow drains Culvert pipes awaiting installations


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11. Southern Province

a. Rehabilitation of A34.7 Km Portion of T2 between Chirundu and LusakaKm75.0 to km109

In July 2005, the Agency awarded a contract to China Henan International CooperationGroup Company limited for the rehabilitation and maintenance of 34.7 km section of road T2 between Lusaka and Chirundu KM75.0 to KM109.7 at contract price of K110,655,185,204 for a duration of eighteen (18) months commencing 1 st November 2005.The scope of works included widening the existing road formation, construction of auxiliary / climbing lanes where required, reduction of steep grades, reconstruct roadpavement layers and reconstruction of some bridges and improvements to the verticalgeometry. The project was supervised by AFRICON.

A review of scanty records availed for audit revealed the following among others:

i. Questionable Quality Control by Consultants

A review of the letter dated 8 th June 2007 addressed to AFRICON from RDArevealed that during site inspections, the consultants inspectors were notfound on site. In particular, the consultants inspectors were not on siteduring critical activities such as laying of the sub base, road base and asphaltconcrete as well as on culvert construction, thus raising concern of quality.

In same letter, RDA also observed that the contractor around KM83 + 400was illegally mixing stabilization material with bulldozer, raising concern onthe role and effectiveness of the inspectorate.

ii. Failure to Adhere to Consultants Advice

A review of two (2) letters dated 24 th and 28 th August 2007 addressed to theDirector RDA from the consultants relating to the design review revealed thefollowing:

The pavement structure with a 150mm sub base was inadequate .

The design life of the structure with 150mm sub base had an expectedlifetime of nine (9) years. Consultants recommended that increasingthe sub base to 250mm would increase the road expected life fromnine(9) years to twenty(20) years at an additional cost of K3.7 billion.

In another letter dated 28 th August 2007,the consultants indicated thatthere was an omission of the base from KM104 + 240 which

substantially compromised design life of the road to only three (3)years. The consultants indicated that the life of the road could be


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increased to fifteen (15) years with the addition of cement stabilisedbase at a cost of K764,000,000.

There was no documentation to indicate that the RDA rescinded itsinstruction of 27 th July 2007 in which it warned the consultants to maintain abase of 150mm and not 250mm.

iii. Failure of a Section of the Road

A review of the consultants letter of 10 th January 2008 to RDA revealed thata flood occurred on 29 th and 30 th December 2007 causing extensive damageto the works. The consultants indicated that the flood was caused byextremely high rainfall and that he would propose mitigation measures toprevent or limit damage in case of a re-occurrence of a similar flood infuture. The consultant further stated that rainfall throughout December 2007

was above normal. In this regard, the consultant issued instructions on 25 th February 2008 to the contractor relating to repair of damage or defectivework and also for further protective measures that were required whichwould include the following among others:

KM ProblemCauses of Problem

99 + 775 Waterponding

No downshuteat low point

99 + 800 Longitudinalcracks

Defective benchingand compaction

100 + 450Longitudinalcracks on Left Hand Side

likely that benching &compactiondefective

100 +500Longitudinalcracks Left hand side

likely that benching &compactiondefective

101 +300 fill subsidenceon Left hand side

Inadequate benchingand compaction

101 + 400fill subsidenceon Left hand side

Probable causeinadequate benching

Compaction.

On 20 th March 2009, the reconstructed portion of road T2 collapsed atchainage 100 +900KM location from Lusaka. In the letter dated 21 st May2009 and addressed to the World Bank, the Director- RDA indicated thatpreliminary assessment revealed that the fill embankment was eroded andweakened by seepage of runoff water from the surrounding high ground thatfound its way across and underneath the road. The director emphasized thatthe landslide was as a result of natural causes and that the initial design didnot include re-alignment or provision of (increased) drainage structures at thelocation.

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However, it was observed that the section of the road failure was within thechainages where the consultant had observed longitudinal cracks as result of defective work. There was no evidence to indicate that the defective work noticed at time of construction had been remedied.

Although the failure occurred during the defects liability period which endedon 28 th June 2009, there was no evidence to indicate that the Agency hadtaken steps to establish whether the failure was caused by negligence on theparty of the consultants or the contractor.

In this regard, despite the failure having taken place during the defectliability period, the contractor was not called to site. Instead a newcontractor, Messrs Sable Transport Ltd, was engaged to carry out temporalworks at a contract sum of K3.5 billion.

Failure of the road at 100 + 900 KM from Lusaka

iv. Failure to Carry Out Permanent Works

A site inspection conducted in October 2009 revealed that the temporalworks were showing signs of failure as evidenced by the longitudinal cracks.

The culvert provided at the wash away point was not functional as it did nothave a provision for the inlet thereby defeating the purpose of the culvert.

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Cracks and a culvert without an inlet on the temporal works

v. Provision of Motor Vehicles

The contract provided for K405,875,000 for procurement of five (5) motorvehicles for supervision. The motor vehicles were to be handed back to theAgency at the end of the contract. It was however observed that out of thefive (5) motor vehicles procured, four (4) were handed over to the Agencywhile one (1) had not been handed over as of October 2009.

b. Contract for the Emergency Repairs of Lusitu Bridge Along M15

On 26 th December 2008, RDA awarded the contract for the emergency repairs of LusituBridge to Sable Transport and Construction at a contract sum of K7,786,786,786 for theduration of three (3) months. The works commenced on 20 th January 2009.

The supervision was conducted by RDA Lusaka Region.

The Scope of works at the bridge were as follows:

Drainage works Pothole patching Base/sub base courses/pavement repairs Bituminous course/pavement repairs Erosional protection/lean concrete Railings repairs and kerb stone installation.

Other works included pothole patching, reinforced concrete retaining wall for slopeprotection, lined mitre drains and gabion construction for slope protection.

As of October, 2009 a total of K6, 319,801,251 had been paid to the contractor andworks were 81% complete.

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However, the following were observed:

i. Irregular Change in the Scope of Works

On 30 th December 2008, the contractor, without authority from the Agency

A review of the letter dated 2 nd February 2009, addressed to the contractor from

ii. Bill of Quantities (BoQ)

In the Report No. 02/09 of March 2009, the Monitoring and Evaluation Unit

The BOQ included trees which did not exist at the site (contract item

The thickness of continuous graded asphalt surfacing included in BOQ

The concrete casting, reinforcement and formwork in BOQ should

The size of the conforce wire costing K56,000,000 in BOQ was not

The works to be carried out on different sites were lumped under the

The rates for concrete were not consistent since the conversion from

. Lack of Work Programme

It was observed that after changing the scope of works, the contractor did notsubmit a revised work plan. In this regard it was not possible to ascertain the

changed the scope of works by changing the design of the agreed interventions.

the Regional Engineer in Lusaka revealed that the contractor had diverted fromthe original bill of quantities in the execution of works without the authority of theProject Manager.

revealed that the standard SATCC BOQ was not used by the Contractor making itdifficult to understand the scope of works from the BOQ. The following errors inthe BOQ were observed:

17.02). This had a costing of K1,400,000.

item 42.01 (a) with costing K195,000,000 had not been specified.

have been billed separately according to standard practice.

specified (contract item 23.01(c))

same quantities, thus resulting in difficulties in measuring the actualworks done.

square meters to cubic meters was giving very high figures. Inaddition, the thickness for the concrete priced in square meters wasnot indicated which could be a source of disputes when measuring theactual value of work done (item 2.4.3)

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n report revealed that there wereinconsistencies in the rates of concrete in the BOQs and no proper rate analysis

too high when convertedfrom square meters and cubic meters but also different (one was K450,000 per

v. Lack of Quality Assurance

Monitoring and Evaluation Report of March, 2009, thecontractor was casting concrete based on the mix design which was not agreed

cords such as daily log sheets and monthlyprogress reports were not available . Further, no site meetings were held during

n of the contract was extended for a period of ninety (90)days to 2 nd July 2009, it was observed that as of October 2009 the works had not

v

n measurements jointly carriedout on site by the Monitoring and Evaluation Unit, the Contractor and technical

progress made by the contractor. As of October 2009, the contractor was still onsite.iv. Questionable and Uncompetitive Rates

A review of the Monitoring and Evaluatio

was carried during evaluation, the rate of lean concrete (stipulated in BOQs)should not have exceeded K100, 000 per square meter.

In addition, the two rates for lean concrete were not only

square and the other was K720,000 per square ) The rate for reinforced concreteshould have been used as a basis to renegotiate the rates for lean concrete andapproximately K870 million could have been saved.

Concrete Works

According to the

upon with the project managers representative (PMR). It was also revealed thatthe Contractor had been carrying out concrete casting in the absence of the PMR.

The quality of the concrete therefore could not be guaranteed since the PMR hadnot been involved in the whole process of concrete casting. This represents a flawin the management of the contracts.

It was also observed that contract re

the course of this project and there was no permanent site supervisor. In thisregard the contract had been executed without supervision from the Agency.

vi. Delayed Works

Although the duratio

been completed and no liquidated damages had been claimed by the Agency.

ii. Quantities, Measurements and Certification

A review of the monitoring and evaluation report o

staff from the Regional Engineers office revealed that most of the quantities inthe BOQ were higher than the actual on the ground. Measurements in the contract


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vi

e carried out on 29 th August 2009 to assess the qualityand scope of works done by the Contractor revealed the following:

Gabion stones were not neatly packed in gabion baskets.

aximum size.ee pictures below).

should have cost K6,319,801,257 instead of K 7,786,786,786 resulting in RDAincurring extra costs of K799,285,786

ii. Physical Inspection

An inspection of the bridg

Gabions

Some stones in baskets were larger than the allowable m(S

Visible gabion cells are not even faced. Stones used in visible faces were notof selected size and

fully packed. Stones are loosely filled. (Seehotograph below).

Oversize stones used in gabion baskets

shape.

Gabion baskets were notp


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Loosely packed stones in gabion baskets

Vertical sides of visible cells were bulged and deformed. Connecting wiresbetween vertical sides of visible cells were insufficient or missing altogether.Normally a minimum of four connecting wires would be provided andtensioned in each 1m visible cell to prevent the deformation of gabion boxes.

Baskets were not properly line-up.

The site foreman did not have drawings for the four gabion.

Although the contractor claimed for construction of 500m 3 gabions, a physicalcount of gabions revealed that only 320 m 3 had been constructed. However,the BoQ provided for 1,200m 3 of gabions.

Concrete Lined Drains

Concrete lined drains were of poor quality and workmanship as:

Drains were wavy and not properly aligned.

The concrete drains were not constructed to specifications set in thecontract in that they did not discharge water into the river.

Poor quality concrete was used. Lumps of concrete taken from thedrain were easily crushed by hand.

ix. Test Results

An aassessment of the strength of four (4) concrete strength samples using theSchmidt Hammer revealed that all four samples had weaker than specified.Results were 12 N/mm sq for three samples and one measured 15 N/mm sqcompared to 25 N/mm sq specified in the contract.

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c. Contract for the Periodic Maintenance of Road D347, Kalomo to KabangaMission in Southern Province 70.1km

In April 2008, the Agency awarded a contract to Messrs China Jiangxi Corporation forthe periodic maintenance of Road D347 Kalomo to Kabanga mission at a contract price of K12,347,730,725 for a duration of six (6) months commencing 13 th June 2008. The scopeof works comprised gravelling and drainage, grading, re-gravelling, reshaping,embankments maintenance and vegetation control. The project was supervised by BariZambia Consulting Engineers Ltd.

As of October 2009, the works had been completed and the contractor had been paidamounts totalling K12,315,592,891.


i. Delay in Engaging Consultant

The supervising consultant was engaged three (3) months after the contractor hadcommenced works. In this regard, the contractor executed works withoutsupervision.

ii. Questionable Award of Tender

The Director RDA recommended to the Director General of the ZNTB in a letter

dated 23rd

April 2008 to award China Jiangxi Corporation for InternationalEconomical and Technical Cooperation at their corrected tender sum of K12,347,730,725. The letter further stated that Reubex Zambia Limited one of the bidders at a sum of K9,714,227,724 was found to be non responsive forproposing a surveyor with a grade twelve (12) qualification instead of a diplomain surveying or civil engineering. It could not be comprehended as to whymanagement did not award the contract to Reubex Construction subject to thecontractor providing a qualified surveyor and thereby saving an amount of K2,633,503,000 of the public funds. It must be noted that staff can be replaced atcommencement or during the implementation of the contract.

iii. Non Submission of Performance Bond by the Contractor

According to the terms of the contract the contractor was required to submit aperformance security bond within twenty eight (28) days of signing the contract.Contrary to this condition, the contractor did not submit the performancesecurity bond.


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iv. Contractors Equipment

A review of the contract documents revealed that the contractors majorequipment at the time of bidding was located in China and Botswana. There wasno evidence to show that the contractor had brought in his equipment from thetwo countries for the project. In this regard, in the Regional Engineers letterdated 5 th August 2008 to the contractor revealed that plant mobilised was all inrelatively bad condition. The letter further stated that clearing and grubbing weredone using slashers and axes.

A review of minutes of the second site meeting of 11 th September, 2008revealed that works were behind schedule.

v. Delayed Mobilisation

Although the contract was to commence on 13 th June 2008, it was observed thatas of 3rd July 2008, the contractor had not mobilised.

vi. Physical Inspection

A physical inspection of the road carried out in September 2008 revealed that allexisting culverts were damaged and in some cases were blocked without outflowchannels. See pictures below;

It was also observed that in some sections of the road the gravel contained stoneslarger than the recommended size.

Damaged culvert at Km 62.7 and a blocked culvert

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Over sized stones contained in

the gravel at KM2.4

Culverts without head walls at km 41.7, and 58.2 kalomo to Kabanga Mission road.

d.

Kafue Mazabuka Road T1- Periodic Maintenance ( TB/CE/005/08 )

In May 2008, the Agency awarded a contract to Messrs Raubex Construction Zambia Ltdfor the periodic maintenance of road T1 from Kafue to Mazabuka at a contract price of K10,017,359,687 with a duration of eight (8) months. The contract was signed on 28 th May 2008 and was to start on 17 th June 2008 and end on 16 th February 2009. The scopeof work comprised pothole patching; crack sealing, surface dressing in some sections,cleaning of drains and shoulder repairs. The project was supervised by ASCO ConsultingEngineers Ltd.

As of October 2009, a total sum of K8,241,733,008 had been paid to the contractorrepresenting 82% of the contract sum and the contract had been completed.


i. Tender evaluation

The contract for the periodic maintenance of Kafue-Mazabuka road was awarded toRaubex Construction Zambia Ltd at a revised bid price for K10,017,359,688 against a

competitive cheaper bid for Raven Works construction for K9,857,517,699. Ravenworks Constructions bid was considered non responsive on the basis that curriculum

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vitae for its site agent, foreman and surveyor did not indicate qualifications and thatthe company only provided audited financial statement for ten(10) months instead of five (5) years. The public procurement act number 12 of 2008 in section 50 (4) statesthat a procuring entity may ask a bidder to clarify their bid in order to assist in theevaluation, but no changes in the substance of bid, including changes in price, shall bepermitted after the date and time of the closing of the bid, unless otherwise providedfor in this act. The institution would have saved K159,841,989 if the evaluationcommittee had followed the provisions of the public procurement act No.12 of 2008.

ii. Delayed Engagement of Supervisor

It was observed that there was a delay of four (4) months in engaging a supervisingengineer for the works. Consequently, the contractor executed the works during theperiod without supervision.

iii. Questionable Certification

In July 2007, the Agency awarded a contract (RDA/007/07) to Raubex ConstructionZambia Ltd for emergency repair of the road at a contract sum of K1,599,585,476.The contract commenced on 5 th July 2007 and was to be completed on 5 th August2007. However, this contract was only certified complete on 22 nd December 2008which was sixteen (16) months after the scheduled completion date. At this time,works under the new contract (TB/CE/005/08) for periodic maintenance of the sameroad had been going on for six (6) months.

iv. Poor Workmanship

A review of documents revealed that execution of the works were poorly executed inthat potholes continued opening up. There were also delays in completing the projectresulting in requests for extension. In addition, the contractor failed to follow thecontract specifications regarding edge repair and use of poor cold premix.

A physical inspection of the road carried out on 20 th September 2009 confirmed thepoor workmanship in that potholes had reappeared barely four (4) months aftercompletion of the project as shown below:


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Pothole at Km 33.6 on the Kafue Mazabuka Road

Cracks and potholes near Chikankataturn off

e. Zimba Livingstone Road TB/CE/019/08, 30KM

Government with the financial assistance from the European Union through the 9th

European Development Fund (EDF), embarked on a project to rehabilitate 72.8km of theZimba to Livingstone T1 road. Government funded the rehabilitation of the first 30kmthrough budget support and the remaining 42.8km was funded by both the EuropeanUnion and Government. On 14 th July 2008, Government through RDA awarded acontract to China Geo- Corporation Ltd to rehabilitate the first 30km of the Zimba Livingstone road at a contract sum of K105,196,183,649 for a duration of nine (9)months. The contract price was later revised to K120, 630,364,245.

The works commenced on 25th July 2008 and were due for completion on 24th April2009 but the completion date was later revised to 18th October 2009.

The scope of work included reaping off old asphalt material, designing and reconstructionof the base. The project was supervised by Zulu Burrow Integrated Engineering andDevelopment Consultants.

As of September 2009, a total of K69,426,309,585 had been paid to the contractor and5km out of a total of 30Km had been completed.


i. Delayed Works

A visit to project site carried out in September 2009 revealed that fourteen (14)months into the contract the contractor had only completed 5km out of a total of 30km.

ii. Misapplication of Funds

In March 2009, the Manager Construction and Maintenance (RDA) on four (4)occasions irregularly instructed the contractor to pay for maintenance of four (4)

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